Simplifying Finances

photo credit: Dplanet

The work to make our life simpler is no quick fix solution, we are in this for the long-term and recognise that whilst we have not exactly been completely committed to the end result over the last few years we have made great strides towards it by what we have done so far, the main thing so far being…

Simplifying Our Finances.

We have been quite lucky in that the both of us have a natural aversion to debt and have never run up huge credit card bills – if we want something we save for it and pay in cash.

The one exception to this though has been the necessity to purchase our house with the aid of a mortgage. We reduced this debt heavily by downsizing to the house where we now live. It has been hard at times, both with the amount of work and the conditions we have had to live in, however the pay off is that we have since managed to eliminate this debt completely through making overpayments and now own our home outright.

In paying the mortgage off it now gives us the knowledge that whatever happens to us employment and income wise we potentially have a roof over our heads and one less bill to pay at the end of the month.

Our other outgoings have room for improvement though! Utility bills, food and fuel can all be reduced and we plan to do so over the coming months by looking at what we use and what we can do to reduce the cost.

One of the biggest ways that we hope do this is by growing a large proportion of what we eat. We have been steadily increasing our productivity in the garden over the last few years and our aim is to improve on this from now on.

Tips to simplify your finances

Imagine how much simpler your financial life would be with no stress about debt. Becoming debt free is one of the most stress-relieving, life-simplifying things you can do. I know that everyone’s situation is different but here are a few ideas that we have found useful in simplifying our finances.

Plan For Upcoming Expenses – Plan and budget for large expenses such as Christmas and holidays. We find that putting away a set amount each month for upcoming purchases elevates the need for using credit cards to make major purchases.

 Buy A Smaller House – When you are looking to buy, consider buying smaller. One of the problems when buying a home is the temptation to buy more than you need. Just remember, the bigger the house, the higher the mortgage payments, insurance premiums, maintenance costs, utility bills, etc… Plus you’ll spend a ton of money buying more junk to fill the house.

Keep A Spending Diary – Each day, record everything you spend into a notebook. We have done this in the past and it has been really useful to pinpoint exactly where all of your cash goes. It also helps to keep you more mindful of what you are spending.

Get Organized – Keep things simple. Consolidate your bank accounts as it makes tracking your finances easier, set up direct debits for paying regular bills so you don’t miss deadlines and keep a note on a calendar when the ones that can’t be automated need to be paid.

Build An Emergency Fund – Few things give you peace of mind like having a stash of cash set aside for emergencies and unexpected expenses. Ours has saved us several times.